bluebooks · April 5, 1971

Bluebook

Prefatory Note

The attached document represents the most complete and accurate version available based on original copies culled from the files of the FOMC Secretariat at the Board of Governors of the Federal Reserve System. This electronic document was created through a comprehensive digitization process which included identifying the bestpreserved paper copies, scanning those copies, 1 and then making the scanned versions text-searchable. 2 Though a stringent quality assurance process was employed, some imperfections may remain. Please note that some material may have been redacted from this document if that material was received on a confidential basis. Redacted material is indicated by occasional gaps in the text or by gray boxes around non-text content. All redacted passages are exempt from disclosure under applicable provisions of the Freedom of Information Act.

In some cases, original copies needed to be photocopied before being scanned into electronic format. All scanned images were deskewed (to remove the effects of printer- and scanner-introduced tilting) and lightly cleaned (to remove dark spots caused by staple holes, hole punches, and other blemishes caused after initial printing).

A two-step process was used. An advanced optical character recognition computer program (OCR) first created electronic text from the document image. Where the OCR results were inconclusive, staff checked and corrected the text as necessary. Please note that the numbers and text in charts and tables were not reliably recognized by the OCR process and were not checked or corrected by staff.

Content last modified 6/05/2009.

(CONFIDENTIAL FR)

April 2,

1971

MONETARY AGGREGATES AND MONEY MARKET CONDITIONS Prepared for the Federal Open Market Committee

By the Staff BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM

April 2,

CONFIDENTIAL (FR)

1971

MONETARY AGGREGATES AND MONEY MARKET CONDITIONS Recent developments (1)

The money supply, both narrowly (M1) and broadly (M2

)

defined, grew more rapidly in March than targeted in the last bluebook, Growth in the adjusted bank credit proxy, however,

as the table shows.

fell somewhat short of its target rate.

If these March figures are not

significantly revised, M1 will have grown at about an 8 per cent annual rate over the first quarter and at around a 5-3/4 per cent annual rate since September. Recent Rates of Growth in Key Monetary Aggregates (Per Cent Annual Rates of Change)

March Bluebook Path M

5.5

Actual 1/ 9.4

First Quarter Bluebook Path Actual 1/ 7.0

8.2

13.5

17.8

15.5

17.4

Adjusted Proxy

12.0

8.5

12.0

10.7

Week ending March 31 is partly estimated. (2)

Shortly after the last Committee meeting, deposit data

coming available for the first

two weeks ending in March suggested that

levels of M1 and M 2 were running well above their bluebook target paths. As a result, annual growth rates for both money supply measures appeared

their bluebook targets by more than the 3 to 4 percentage

to be exceeding

point deviation allowable under the directive proviso.

In light of this

development, the Desk adjusted the sights of its open market operations slightly, aiming at a Federal funds rate in a 3-1/2 to 3-3/4 per cent range.

Later in

sustained in

the month,

the money supply remained above target levels,

part by a much sharper drop in

U.S.

Government deposits at

banks than had been projected at the time of the last meeting.

The short-

fall in Government deposits occurred chiefly because the Treasury had to delay planned new financing until Congress raised the Federal debt ceiling.

The greater than anticipated drop in Government deposits also

explains most of the shortfall in

the bank credit proxy below target,

although the further run-off of Euro-dollar borrowings by major banks was appreciably larger than assumed. Recent Paths of the Key Monetary Aggregates (Seasonally adjusted, billions of dollars) M2

M1 Bluebook Path

Actuals

Bluebook Path

Actuals

Adjusted Credit Proxy Bluebook Path Actuals

Month February March

217.3 218.3

217.3 219.0e

430.7 435.4

430.8 437.2e

337.7 341.1

337.7 340.1e

Week ending Mar. 3 10 17 24 31

217.3 217.8 218.5 218.8 218.7

218.5 218.3 218.5 219.3 220.5e

432.8 433.9 435.5 436.5 437.2

434.6 435.2 436.2 438.5 440.4e

338.9 340.4 341.5 341.6 341.1

339.6 340.4 340.5 338.9 340.2e

e--Estimated. (3)

Even though the Desk has been aiming over most of the inter-

meeting period at a Federal funds rate in

the 3-1/2 to 3-3/4 per cent range,

unforeseen technical factors have continued to push the funds rate to or above the high end of this range, despite very large System repurchase agreements with dealers.

In the tax date week, ending March 17, the

effective funds rate averaged over 3.90 per cent, and in the week ending March 31, the average slightly exceeded 4.00 per cent.

A succession of

large daily shortfalls in Desk estimates of reserve availability from float and the Treasury balance intensified the money market tightness in the tax date week.

In the latest week, which included the publication

date for bank statements, normal pressures arising from bank desires to avoid borrowing on the final day of the quarter were strongly accentuated by heavy dealer demands for financing, including the need to pay for the new tax bill noted below.

In the week ending March 31, net free reserves

amounted to $163 million, as a number of major banks--uncertain about their statement date positions--ran cumulative reserve surpluses in excess of what could be carried over.

In the tax date week, net borrowed

reserves averaged about $55 million, while in the statement week ending March 24 they averaged $270 million.

Member bank borrowings averaged

about $290 million over the three week period. (4)

Treasury bill yields, while fluctuating rather widely

since the last meeting of the Committee, show net advances for the period of as much as 35 basis points. quoted around 3.65 per cent.

Most recently, the 3-month issue has been Other short-term interest rates have shown

less variability than Treasury bill rates, but have also tended to back up somewhat in response to the changes in bill rates.

A key factor in

the recent rise of short-term rates has been the heavy volume of Treasury

cash financing in the bill market.

These operations involve a $2 billion

addition to the April tax bill (auctioned March 24 for payment March 30 without tax and loan credit); a $2.2 billion bill strip (auctioned March 31 for payment April 6); and $800 million of new 6-month bills (being offered $200 million at a time in the four weekly auctions starting March 22).

Moreover, with the Federal funds rate tending to rise over

the period, and with no further Federal Reserve cut in the discount rate, market participants began to ask whether the System might be moving toward a somewhat tighter money market stance in view of large short-term capital outflows from the U.S.

and resultant uneasiness in foreign exchange

markets and in light of the recently more rapid growth of the monetary aggregates.

This tended to encourage the modest rise in short-term rates

and was also a factor in the recent hesitation in capital markets and the partial reversal of long-term rate declines. (5)

The table on the next page summarizes seasonally adjusted

annual rates of change in major financial aggregates for selected periods.

Third Quarter (Sept. over

June)

Fourth Quarter (Dec. over Sept.)

First Quarter (Mar. over Dec.)

Last 6 months (Mar. over

8.9

Total Reserves

19.1

11.0

Nonborrowed Reserves

24.4

11.0

Sept.)

10.3

Concepts of Money M1 (Currency plus demand deposits 1/)

5.8

6.1

3.4

8.2

M 2 (M1 plus time deposits at commercial banks other than large CD's)

11.0

9.2

17.4

13.5

M 3 (M2 plus deposits at thrift institutions)

10.3

9.7

18.2 3/

13.2 4/

Bank Credit Total member bank deposits (Bank credit proxy adj.) Loans and investments of commercial banks 2/

17.2

10.7

9.6

13.9

13.3

9.8

Short-term market paper (actual $ change in billions) Large CD's

$ 8.5

$ 4.3

Bank-related commercial paper N.S.A.

-3.0

- 2.3

Nonbank commercial paper

1.2

1.5

$ 1.9

0.7 3/

$ 6.2

- 1.5 4/

- 0.5

Other than interbank and U.S. Government. Based on month-end figures. Includes loans sold to affiliates and branches. February 1971 over December 1970. February 1971 over September 1970.

N.S.A. Not seasonally adjusted. NOTE: All items are based on averages of daily figures, except for data on total loans and investments of commercial banks, commercial paper and thrift institutions--which are either end-of-month or last Wednesday of month figures.

Prospective developments (6)

The table on the next page shows three alternative monthly

paths for key monetary aggregates through the second quarter.

Money

market conditions now estimated to be consistent with these paths are noted below, using the annual rates of growth in M 1 as an index of the collection of aggregates. Federal funds rate Alternative A

3-3/4

Member Bank Borrowings

Net Reserves

250-350

+50 to -150

Alternative B

4 -- 4-3/4

400-500

-150

to -300

Alternative C

4-3/4--5-1/2

500-600

-250

to -400

(7)

The money market specifications for alternative A include a

Federal funds rate around 3-3/4 per cent, the most recent Desk operating target.

The Federal funds rates assumed to be consistent with the various

monetary aggregate paths are all somewhat higher than specified at the time of the last FOMC meeting for given second quarter growth rates in M1 .

This is partly because demand for M 1 in March was stronger than

anticipated under prevailing money market conditions.

The funds rates

have been moved up more for alternatives B and C, since these alternatives involve a slowing in the M 1 growth rate over the second quarter from the recent pace and since there is one month less than there was at the time of the last meeting to affect public demand for cash balances in the second quarter.

-7Alternative Monthly and Quarterly Paths of Key Monetary Aggregates (Seasonally adjusted, billions of dollars)

M2 Alt. 1971 February March April May June

217.3 219.0 220.8 223.1 224.0

Alt. C

Alt. A

Alt. B

Alt. C

217.3 219.0 220.6 222.3 222.8

217.3 219.0 220.5 221.9 222.4

430.8 437.2 442.2 447.1 450.1

430.8 437.2 442.0 446.1 448.5

430.8 437.2 441.8 445.5 448.0

Alt.

Per Cent Annual Rates of Growth March April May June

9.4 10.0 12.5 5.0

1st Q. 1971 2nd Q. 1971

9.4 9.0 9.0 2.5

9.4 8.0 7.5 2.5

17.8 13.5 13.5 8.0

17.8 13.0 11.0 6.5

17.8 12.5 10.0 6.5

8.2 7.0

8.2 6.0

17.4 12.0

17.4

17.4 10.0

Total Reserves

Adjusted Credit Proxy Alt. A 1971 February March April May June

337.7 340. 1 343.5 345.0 346.7

Alt.

337.7 340.1 343.4 344.2 345.8

10.5

Alt.

337.7 340.1 343.3 343.8 345.2

Alt. A 30.5 30.7 30.8 31.3 31.3

Alt. B 30.5 30.7 30.8 31.2 31.1

Alt. C 30.5 30.7 30.8 31.2 31.0

Per Cent Annual Rates of Growth March April May June

8.5 12.0 5.0 6.0

8.5 11.5 3.0 5.5

8.5 11.5 3.0 5.0

8.5 4.0 18.0 -1.5

15.0 - 5.0

1st Q. 1971 2nd Q. 1971

10.7 8.0

10.7 6.5

10. 7

11.0 7.0

11.0 4.0

6.0

8.5 3.0

8.5 2.5 14.0 - 6.5

11.0 3.5

-8(8)

Under all three alternatives, growth rates in M 2 are

expected to slow from the exceptionally rapid first quarter pace.

Growth

in time and savings deposits other than large CD's has slowed somewhat in recent weeks.

It is expected to slow further as a result of spreading

downward adjustment by banks in rates offered on time deposits and as the public's shift from market to deposit assets tends to lose force.

Growth

in the bank credit proxy in the second quarter may also be slower than in the first.

With banks already quite liquid and loan demand expected

to be modest, large CD's are expected to grow relatively little over the quarter, although banks may seek longer-term CD's more actively if expectations of rising interest rates become prevalent.

Liabilities to

foreign branches are assumed to decline more slowly--apart from an abrupt adjustment related to financing of the recently announced offshore Treasury issue--as the cost of holding the relatively small amount of such liabilities remaining becomes less burdensome.

After the new Treasury certificate

goes on the books, about half of the banks' remaining Euro-dollar base would be in the form of high-yielding Ex-Im Bank and Treasury securities. (9)

Assuming a Federal funds rate trading around 3-3/4 per

cent growth in M 1 in April--at around 10 per cent--is expected to be little changed from the March pace.

In large part this growth rate

reflects the high level of demand deposits already reached by the end of March; if there were no change from that level during April, M 1 would average 8 per cent higher than in March.

Even at the higher funds

rates specified under alternatives B and C, the slowing in the growth rate

-9in April is likely to be modest, with more of an effect later in the quarter.

Weekly paths for the various monetary aggregates are shown

in the table on the next page. With money market conditions as specified for alterna-

(10)

tive A, the 3-month bill rate is likely to be in a 3-1/4--3-3/4 per cent range between now and the next meeting of the Committee. demand from the $4-1/4 billion maturing April tax bill,

Reinvestment temporary

purchases from the proceeds of a large though diminishing volume of capital market financing, temporary investment of State and local tax receipts,and potentially large demands from foreign monetary authorities may exert downward pressure on bill rates.

However, higher Federal funds

rates--such as contemplated under alternatives B and C--would likely raise bill rates significantly--with the 3-month bill perhaps up to ranges of 3-3/4--4-1/2 per cent and 4-1/2--5-1/4 per cent, respectively--as dealers attempt to get out from under sizable bill positions. The Treasury is expected to announce its mid-May refund-

(11) ing on April 28.

Nearly $6 billion of publicly held securities mature.

It is too early to tell whether an advance refunding will be undertaken and/or whether some new cash will be raised in conjunction with the refunding.

The possibilities of an advance refunding will depend in part

on whether or not money market conditions tighten significantly between now and then.

The Treasury may, however, offer a coupon issue maturing

in more than seven years as a part of the mid-May financing.

-10Alternative Weekly Paths of Key Monetary Aggregates (Seasonally adjusted, in billions of dollars) M2 Alt. 1971 March

April

May

Alt.

Alt. A

Alt. B

Alt. C

24p

219.3

438.5

31e

220.5

440.4

220.6

441.0

221.6

221.5

442.6

442.5

219.7

219.5

219.4

441.4

441.2

441.1

221.3

221.0

220.8

443.6

443.3

443.0

221.3

220.8

220.6

444.6

443.9

443.6

Adjusted1 Credit Proxy Alt. A 1971 March

April

May

Alt.

Total Reserves C

Alt. A

Alt. B

Alt. C

24p

338.9

30.5

31e

340.2

31.0

342.4

30.6

343.4

343.3

30.6

343.9

343.8

343.7

31.1

31.0

344.0

343.7

343.6

31.0

30.9

345.0

344.5

343.3

31.3

31.2

p--Preliminary. e--Estimated from partial data.

-11(12)

Long-term markets are likely to remain sensitive to money

market conditions as indicators of Federal Reserve policy.

Thus, attain-

ment of the conditions specified in alternative A would be likely to reinforce other trends in capital markets now expected to contribute to some further decline in long-term rates, as noted in the Greenbook.

the other hand, if money market conditions are made firmer, as specified under alternatives B and C, shifts in market expectations about the course of short-term rates and monetary policy might tend to offset the underlying trends.

A rise in long-term rates would seem likely if the Federal

funds rate were to trend convincingly above 4 per cent, with the rise in long rates largest if money market conditions were to tighten as much as specified under alternative C.

-12-

Possible directive language (13) use if

Alternative A.

This language is proposed for possible

the Committee decides to retain the form of the present directive,

involving a primary instruction concerned with money market conditions

and long-term interest rates and a proviso clause relating to the aggregates. "To implement this policy, System open market operations until the next meeting of the Committee shall be conducted with a view to maintaining prevailing money market conditions while accommodating any downward movements in long-term rates; provided that money market conditions shall be modified if

appears that the monetary

and credit aggregates are deviating significantly from the growth paths expected,

TAKING ACCOUNT OF THE FORTH-

COMING TREASURY FINANCING." With respect to the proposed reference to the forthcoming Treasury financing (in this and the other alternatives) the Treasury's announcement is expected on April 28, as indicated in paragraph (11) above. Committee adopts this alternative,

If the

may wish to consider the money market

conditions noted for alternative A in paragraph (6) as a description of "prevailing" conditions,

and for purposes of the proviso clause,

the aggregate growth paths discussed earlier in tive A as the "expected"

paths.

to adopt

connection with alterna-

The Committee could also specify a slow-

er growth path for purposes of the proviso,

the effect of which would be to

-13activate the proviso sooner if the staff projections prove to be correct. Or, if the Committee so desires, it could use a directive with a structure similar to alternative A but with the specifications for money market conditions and aggregates given above in

connection with alternative B or C.

In such a case, the language preceding the proviso clause might be modified to call for "attaining firmer money market conditions;". (14)

Alternative B.

This language is proposed for possible

use if the Committee decides (a) to formulate its primary instruction in terms of desired growth rates for the aggregates, and (b) to adopt as targets the growth rates (including a 7 per cent second-quarter rise in M 1 ) discussed earlier in connection with alternative B, which would be somewhat more moderate than the rates experienced recently, "To implement this policy, THE COMMITTEE SEEKS TO

PROMOTE SOMEWHAT MORE MODERATE GROWTH IN MONETARY AND CREDIT AGGREGATES OVER THE MONTHS AHEAD,

WHILE CONTINUING

TO MEET SOME PART OF RESERVE NEEDS THROUGH PURCHASES OF

COUPON ISSUES IN THE INTEREST OF PROMOTING ACCOMMODATIVE CONDITIONS IN LONG-TERM CREDIT MARKETS.

System open

market operations until the next meeting of the Committee shall be conducted with a view to maintaining [DEL: prevailing BANK RESERVES AND money market conditions CONSISTENT WITH THOSE OBJECTIVES,

TAKING ACCOUNT OF THE FORTHCOMING

TREASURY FINANCING [DEL: movedownward any accommodating while ments market] money that provided rates, term long in

-14-

the that appears it if modified be shall conditions [DEL: monetary signifideviating are aggregates credit and expected]." paths growth the from cantly

Accommodation of declines in long rates is not listed as a specific Committee objective under this (and the following) alternative because

of the likelihood that such rates would rise if the money market is firmed to the degree that would appear to be necessary to achieve the However, a reference is suggested to

aggregate growth rates specified.

purchases of coupon issues "in the interest of promoting accommodative conditions in long-term credit markets" on the assumption that even if the Committee adopts this alternative it will want to index a concern with conditions in capital markets. (15)

Alternative

. This language is proposed for possible

use if the Committee decides to adopt as targets the growth rates for the aggregates (including a 6 per cent second quarter rise in M1) discussed earlier in connection with alternative C.

"To implement this policy, THE COMMITTEE SEEKS TO PROMOTE MODERATE GROWTH IN MONETARY AND CREDIT AGGREGATES OVER THE MONTHS AHEAD,

WHILE CONTINUING TO MEET SOME PART

OF RESERVE NEEDS THROUGH PURCHASES OF COUPON ISSUES IN THE INTEREST OF PROMOTING ACCOMMODATIVE CONDITIONS IN

LONG-TERM CREDIT MARKETS.

System open market operations

until the next meeting of the Committee shall be conducted with a view to maintaining [DEL: prevailing]

BANK

RESERVES AND money market conditions CONSISTENT WITH

-15-

THOSE OBJECTIVES,

TAKING ACCOUNT OF THE FORTHCOMING

downward any accommodating while TREASURY FINANCING {DEL: movements in long term rates, provided that money appears it if modified be shall conditions market deviating are aggregates credit and monetary the that significantly expected]." paths growth the from

This language differs from alternative B only in the use of the term "moderate" to describe the lower target growth rates for the aggregates.

That term is suggested because the second-quarter growth rates specified are within the range the Committee recently has considered moderate in an absolute sense.

CHART 1

STRICTLY CONFIDENTIAL (FR)

4/2/71

MONETARY AGGREGATES NARROW MONEY SUPPLY M1

BILLIONS OF DOLLARS

220

218 7% PATH 216

214

J, I

__ _

BROADER MONEY SUPPLY M2

1969 -

Actual

Currently Projected

1971

1970 --- Wkly Path, Indicated at FOMC Meeting43/9/71)

0 '70

'71 ..-

Longer Run Path

,CHART IA

STRICTLY CONFIDENTIAL (FR)

4/2/71

MONETARY AGGREGATES ADJUSTED CREDIT PROXY

BILLIONS OF DOLLARS

1348

13%

-320

-328 I I

I I

TOTAL RESERVES 14% PATH

1969

1971

3970

Actual

--- Currently Projected

--- Wkly Path, indicated at FOMC Meeting3/9/71)

'70

.Z-

Longer Run Path

4/2/71

CHART 2

INTEREST BEARING SOURCES OF BANK FUNDS BILLIONS OF DOLLARS

-230

TOTAL TIME AND SAVINGS DEPOSIT

-90

TIME AND SAVINGS DEPOSITS OTHER THAN CD'S

NONDEPOSIT SOURCES

1969

1970

1971

CHART 3

MONEY MARKET CONDITIONS AND INTEREST RATES MONEY MARKET CONDITIONS

1969

1970

INTEREST RATES Short-term

1971

INTEREST RATES Long-term

1969

1970

1971

STRICTLY CON FIDENTIAL (FR)

Table 1

PATHS OF KEY MONETARY AGGREGATES

April 2, 1971

Monthly Pattern in Billions of Dollars 1970-

Dec.

214.6

1971,

Jan. Feb. Mar.

218.3

214.8 217.3 (219.0)

Apr.

219:5

(220.8)

4 19.0

331.2

29.9

435.4

4 23.0 4 30.8 (4 37.2)

341.1

334.1 337.7 (340.1)

30.2 30.5 (30.7)

439.8

(4 42.3)

345.5

(343.4)

(30.8)

Annual Percentage Rates of Change--Quarterly and Monthly 1970:

1st 2nd 3rd 4th

5.9 5.8

Qtr. Qtr. Qtr. Qtr.

1971:

1st Qtr.

1970:

Dee.

1971:

Jan. Feb. Mar.

3.4 8.4 11.0 9.2

6.1 3.4 7.0

(8.0)

15.5

Apr.

8.3

-2.9 2.6 19.1 6.6

(10.5)

(11.0)

13.0

16.5

18.4 12.2 11.4

12.0

10.5 12.9 (8.5)

(9.0)

15.5

(11.5)

(3.5)

17.5)

5.5

( 9.5)

13.5

11.5 22.1 (18.0)

6.5

(10.0)

12.0

(14.0)

1.1 14.0

0.5 6.5

17.2 12.0

Weekly Pattern in Billions of Dollars Feb.

1971:

Mar.

Apr. NOTES.

3 10 17 24 31 7

335.6

425.3 428.6 431.7 432.6

214.7 216.2 218.2 217.9

3 10 17 24

337.4 337.2 338.5

339.6 340.4

30.3 30.3 30.7 30.6

219.3 220.5

432.8 433.9 435.5 436.5 437.2

434.6 435.2 436.2 438.5 440.4

338.9 340.4 341.5 341.6 341.1

340.5 338.9 340.2

30.7 30.5 31.0 30.6 31.0

(220.6)

437.8

(441.0)

340.0

(342.4)

(30.6)

217.3 217.8

218.5 218.3

218.5

218.8 218.7

219.0

Annual rates of change ether than those for the past are rounded Data shown in parenthesis are current projections. Currency plus private demand deposits. i/ plus time deposits other than large CD's. 2/ M pe - artially estimated.

to the nearest half per cent.

FR712-D Rev2/16/71

STRICTLY CONFIDENTIAL (FR)

Table 1-A

PATHS OF KEY MONETARY AGGREGATES

April 2, 1971

Monthly Pattern in Billions of Dollars 1970

dec.

6.2

230.4

204.4

26.0

11.6

1971-

Jan. Feb. Mar.

244.7

235.3 240.9 (246.0)

217.1

208.2 213.5 (219.1)

27.1 27.4 (27.9)

10.1 8.6

5.7

6.7 6.2 (4.7)

(7.0)

Apr.

6.4

(5.0)

248.2

(249.4)

220.3

(221.4)

(28.0)

(6.1)

1970,

Annual Percentage Rates of Change -Quarterly and Monthly 1.4 14.1 32.2 21.8

( ( ( (

1st 2nd 3rd 4th

0.9

11.3 16.5 15.4 25.0

(27.0)

1971:

1st (

1970-

Dec.

28.8

19.7

1971:

Jan. Feb. Mar.

25 5 25.1

25.0

S 19.5

Apr.

S17,0

(27.0)

28.6 (25.5)

20.0

22.3 30.5 (26.0)

(16.5)

17.5

(18.0)

Weekly Pattern in Billions of Dollars 7.1 6.3 5.0

10 17 24 Mar,

NOTES:

Apr. I

3 10 17 24 31 pe 7

6.6 i

5.0 5.9 6.3 3.5 2.6

4.9 6.2 6.7 5.8 4.0 I

(4.3)

210.6 212.3 213.5 214.6

27.0 27.4 27.3 27.4

8.8 9.1 8.7 8.2

215.5 216.1 217.0 217.7 218.5

216.1 216.9 217.7 219.2 219.9

27.7 27.8 28.5 27.9 27.8

8.0 7.5 7.0 6.6 6.6

218.8

(220.3)

237.6 239.8 240.7 242.0

Veb,

1971-

243.1 243.6 244.7 245.3 246.2

243.7

246.6

(248.1)

244.7 246.2 247.1 247.6 S

Annual rates of change other than those for the past are rounded to the nearest half per cent. Data shown in parenthesis are current projections. pe - Partially estimated.

(27.8)

(6.6) a

FR 712-K Rev2/16/71

ninually 1968 1969 1970

CONFIDENTIAL(FR)

AGGREGATE RESERVES AND MONETARY VARIABLES

April 2, 1971

Reserve Aggregates 2

eod

Table 2

Total Period7 Reserves

+ 6.0

1.6

Nonborrowed Reserves

4 7.8

RETROSPECTIVE CHANGES, SEASONALLY ADJUSTED (Annual rates in percent) Monetary Variables Total 4 Money Supply

Member Bank Deposits

3.0

Adjusted 5 Credit Proxy

Total

Currency

Private Prvate Demand Deposits

Addenda 10

T67e Deposits Adjusted

Thrift Instit Deposits

Nonbank Commercial Paper

n a.

8.3

+ 3.1 + 5.4

+ 6.0 + 6.3

+ 7.9 + 2.4 + 5.1

+11.1

n.a.

+18.4

+ 6.3 + 3.4 + 7.8

n.a.

+ 5.1

+ 1.2

+ 6.5 + 5.4

+ 4.7 + 0.1

- 3.5 - 6.6

+ 5.3 + 1.6

+ 7.8 +27.9

+ 4.7 +10.6

+12.8

-12.7

+ 1.8 + 1.4

+31.6 +23.2

+14.1 +32.2 +21.8

+ 2.5 + 7.0 + 9.3 +11.5

+17.8 +7.5 -16.2 +20.4

+ 9.0 - 4.0 +11.8

- 1.2

7.8

+ 7.4

- 5.0

+ 6.4

+ 9.5

+ 0.7 -3.9

- 3.7 - 2.4

-0.2 +13.0

+ 1.9 +17.1

+ 3.3 +20.0

+ 3.5 +12.9

+ 5.9 + 4.8

+ 7.8 + 4.6

+ 5.3 + 4.7

3rd Qtr. 1969 4th Qtr. 1969

- 9.3 + 1.4

- 4.8 - 0.1

- 9.4 + 0.1

- 4.3 + 2.0

+ 0.8 + 1.6

+ 4.5 + 6.2

+ 0.3

1st Qtr. 1970 26d Qtr. 1970

- 2.9 + 2.6

+ 0.6

3rd Qtr. 1976

+19.1 + 6.6

0.5 + 6.5 +17.2 + 8.3

+ 5.9 + 5.8 + 6.1

4th Qtr. 1970

- 0.4 + 4.1 +24.4 + 9.4

+ 3.4

+ + + +

+ 0.8

+ 0.6

+ 2.6

+ 0.8

+ 3.7

+ 1.3

+27.4

- 3.5 - 5.5

+ 5.2 + 5.2 + 7.8

+ 9.9 - 6.8 +12.9

- 8.0

- 2.5 + 3.1 + 6.7

+12.6 +26.2 +13.8

+ 8.1 + 5.3 + 7.3

+34.4 +18.9 -30.0

+11.9 + 5.9 +10.0

-87.5

-7.2 +49.6

+10.6 + 9.4 +14.2

+32.4 -28.7 +58.1

+24.9 +18.5

- 9.0 -10.9

Semi-annually 1st Half 1969

2nd Half 1969 1st Half 1970

2nd Half 1970

3.5 4.6

n.a.

+28.3

+1.7

uarterly

+ 6.0 +24.1 +15.1

6.1 9.4 3.3 5.8

5.3 5.3 6.7 2.7

- 0.4

+ 1.4

1969:

Dec.

+ 6.3

+12.1

1970:

Jan.

+ 3.1

+ 7 2

feb.

-12.6

-15.6 + 7.5

- 4.2 - 8.0 +14.0

+10.7

+ 9.4 - 4.1 +12.3

+21.3 -13.9 + 0.5

+25.4 -19.0 + 6.2

+16.8 - 4.5 + 5.8

+13.7 - 1.2 + 7.0

+ 9.9 + 5.2 + 2.3

+10.3 +15.3 + 2.5

+10.5

+19.7

+ 3.0 + 2.2

+10.9

+ 6.0 +23.3 +27.5

-16.1 +48.8

+22.7

+18.1 +23.2 + 9.7

+ 5.7

+ 7.5

+ 4.4

+35.6

+ 6.8

+ 2.5

+ 8.9

+28.8 +29.8

+ 1.1 + 7.0 +16.5

+ 1.1 + 2.8 + 6.2

+ 7.5 + 4.9 + 4.9

- 0.7 + 2.2 + 6.6

+10.5 +12.9

+ 1.1 +14.0

+ 7.4 + 9.8

- 1.4 +16.0

March

April May June

July Aug. Sept.

1971:

+29.2 +19.0

+40.1

+10.1

Oct.

Nov. Dec.

+ 3.6 +18.4

+ 4.4 +22.8

+13.1 +21.4

Jan.

+t2,2 +11.4

+ 8.8

+16.1

Feb.

1.9

+15.1

+19.3

+ 6.6

+ 5.7

+ 1.2 +11.2

+11.4

+20.3 +15.1

+28.8 +25.5

+28.6

NOTE:"

reserve series have been adjusted to eliminate changes in percentage reserve requirements against deposits, but reserve requirements IFR 712- E Aggregate on Eurodollar borrowings are included beginning October 16, 1969, and requirements on bank-related commercial paper are included beginning October 1, 1970.

CONFIDENTIAL (FR) April 2, 1971

Table 3

AGGREGATE RESERVES AND MONETARY VARIABLES SEASONALLY ADJUSTED

(In millions ofdollars) 1969-

1970:

1971:

2/,530 27,401 27 402

2b.275 26,214 26 383

27,334 27,161 27,144

288.0 285.3 285.7

Oct. Nov. ec.

27 354 27 783 27,928

26.210 26 538 26,806

27 129 27 548 27,707

Jan. Feb. March

28,001 27,722 27.723

26.966 26,615 26,782

April May June

28,216 27,890 27,902

July Aug. Sept.

202.6 202.8

158.1 157.4 157.6

198.1 195.4 194.8

14. 12, 12,

184.0 182.9 182.8

305.7 303.8 304.2

26.0 26.5 27.5

283.5 285.8 285.8

203.2 203.5 203.6

157.6 157.6 157.7

194.2 194.0 194.6

11 11 11

182.6 182.9 183.4

302.2 305.5 305.7

28.0 28.4 29.1

27,823 27,523 27.536

284.8 282.9 286.2

205.2 204.5 206.6

159.0 158.1 159.8

193.3 193.5 195.3

182.7 182.9 183.8

304.8 303.4 306.1

29.4 30.0 30.4

27,350 26,916 27,056

28,046 27,692 27.713

290.2 289.1 290.5

208.3 209.2 209.6

161.2 161.6 161.9

198.5 200.3 202.2

185.6 187.1 189.0

309.6 309.3 311.1

31.2 31.7 30.9

28,041 28 585 29,240

26,694 27,780 28,708

27,896 28,408 29,024

296.0 303.2 308.0

210.6 211.8 212.8

162.5 163.7 164.6

208.2 213.2 218.5

191.3 194.2 196.8

315.8 321.9 324.5

28.7 28.5 29.7

Oct. Nov. Iec.

29,385 29,474 29.925

28,928 29,033 29.584

29,134 29,233 29.703

310.6 314.0 319.6

213.0 213.5 214.6

164.5 164.8 165.7

222.2 225.0 230.4

199.1 201.1 S204.4

324.8 326.7 331.2

30.5 29.7 31.2

Jan.

30,229 30,515

29,801 30,176

30,029 30,255

323.9 329.1

214.8 217.3

165.5 167.7

235.3 240.9

208.2 213.5

334.1 S 337.7

Feb.

1971:

NOTES:

(In billions of dollars)

July Aug Sept.

203.1

Feb.

3 10 17 24

30,250 30,293 30,677 30,610

29,880 30,096 30,066 30,450

29,990 30,080 30,370 30,383

326.8 328.3 328.5 330.2

214.7 216.2 218.2 217.9

49.5 49.5 49.9 49.5

165.3 166.8 168.3 168.4

237.6 239.8 240.7 242.0

27.0 27.4 27.3 27.4

210.6 212.3 213.5 214.6

335.6 337.4 337.2 338.5

30.5 31.5 31.0 31.2

Mar.

3 10 17 p 24 p

30,655 30,539 30,955 30,552

30,252 30,068 30,625 30,232

30,335 30,427 30,676 30,564

331.6 332.9 333.5 332.4

218.5 218.3 218.5 219.3

49.8 49.8 50.0 50.0

168.7 168.5 168.5 169.3

243.7 244.7 246.2 247.1

27.7 27.8 28.5 27.9

216.1 216.9 217.7 219.2

339.6 340.4 340.5 338.9

30.9 31.2 31.1 31.1

Aggregate reserve series have been adjusted to eliminate changes in percentage reserve requirements against deposits, Euro-dollar borrowings are included beginning October 16, 1969, and requirements on bank-related commercial paper are 1970. Adjusted credit proxy includes mainly total member bank deposits subject to reserve requirements, bank-related Monthly data are daily averages Weekly data are daily averages for statement weeks. dollar borrowings of U.S. banks. commercial paper figures which are for last day of month.

but reserve requirements on included beginning October 1, commercial paper, and Euroexcept for nonbank

FR 712-F

Table 4 MARGINAL RESERVE MEASURES (Dollar amounts in millions, based on period averages of daily figures) Member Period

Free reserves

Excess reserves

Total

Banks Borrowings ty C R e s e r v e Major banks Other 8 N.Y. Outside N.Y.

Country

Monthly (reserves weeks ending in): 1969--July August September October November December

-1,045 - 997 744 995 975 - 849

266 214 282 195 238 278

1,311 1,211 1,026 1,190 1,213 1,127

89 81 83 106 120 268

250 253 236 327 387 310

364 256 222 293 250 220

608 621 485 464 456 329

1970--January February March April May June July August September October November December

- 759 - 916 - 751 - 687 - 765 - 736 -1,134 - 706 - 374 - 274 199 84

169 210 129 178 159 171 183 175 235 193 210 264

928 1,126 880 865 924 907 1,317 881 609 467 409 348

148 106 90 227 165 140 218 143 101 12 42 36

287 317 225 331 241 289 460 278 115 40 17 16

232 289 287 119 228 217 348 273 274 313 294 265

261 414 278 188 290 261 291 187 119 102 57 30

1971--January February March p

140 71 118

238 264 194

378 335 312

45 29 41

36 30 17

262 248 238

35 29 16

2 9 16 23 30

482 348 144 507 389

178 415 356 -47 272

660 763 500 460 661

79 160 89 75 1C3

181 143 93 77 79

221 343 224 258 325

179 117 94 50 154

1970--Sept.

352

398

304

14 21 28

409 397 242

41 189 191

a5n 586 433

16 11

97 13

312 342 292

71 131 117

4 11

105 163

318 282

423 445

11 69

15 29

311 282

86 65

166

164

330

295

360

436

287

Dec.

2 9 16 23 30

38 154 279 114 164

417 136 120 211 434

455 290 399 325 270

86 -55 39 --

22 -46 11 --

300 263 268 250 245

47 27 28 25 25

1971--Jan

6 13 20 27

138 245 380 72

545 32 92 282

407 277 472 354

71 -82 26

60 -63 20

250 249 284 266

26 28 43 42

Oct.

Nov.

p -

Feb.

3 10 17 24

46 42 264 67

237 205 297 317

283 247 561 250

--114 --

--121 --

253 229 280 228

30 18 46 22

Mar.

3 10 17 p 24 p 31 p

88 339 56 270 163

170 82 234 63 420

258 421 290 333 257

-108 46 52 --

1 51 -15 16

241 249 231 252 219

16 13 13 14 22

rreliminary.

Table 5

(Dollar amounts

Period Period Year: 1969 (12/25/68 - 12/31/69) 1970 (12/31/69 - 12/30/70)

Total Federal Reserve credit (Excl. float) s floar~it

SOURCE OF FEDERAL RESERVE CREDIT Retrospective Changes in millions of dollars, based on weekly averages of daily figures)

U.S. Government securities Total holdings Tna

Other

Bills 1/

Federal Agency Securities Agenwinyie

Repurchase agreements purhas

+5,539 +3,351

+5,192 +4,276

2 9 16 23 30

+ +

189 473

248 982

689

+ + + +

164 316 14 864 418

7 14 21 28

183

(--

+ -

482 5 224 479

56 67 268

(-( --

Nov.

4 11 18 25

+ + -

692 48 671 141

( -) (- 214) (+ 214) (- 150)

Iec.

2 9 16 23 30

986

853

(+ 150)

303

145

+ -

697 122 143

(- 244) (+ 244)

6 13 20 27

938

722

+ -

534 64 204

308

153 - 81

(F 97) (+ 46) (- 159) (+ 85)

3 10 17 24

236

928

+ 61 171 +1,082 - 518

(+ 74) (- 412) (+ 412) (- 367)

3 10 17 p 24 p 31 p

+ + -

279 275 761 516

286

414

736

432

502

530

(+ ((+ ((+

+4,279 (

+3,220 (-

)

+ 707

143)

+1,180

206 124

+ -

67 63

Member banks borrowings

Bankers' acceptances + -

35 28

Weekly: 1970--Sept.

Oct.

1971--Jan.

Feb.

Mar.

Figures in

+ -

((-

.JI

______I

90) 256)

) 0) )

)

(--

586 -

)

(+ 346)

610 S 75 + 711

+1,523

-____

( --

( -- )

( --

35 3

parenthesis reflect reserve effect of match sale-purchase

+ 134 + 41 + 114

)

+ 152 + 137

143)

+ 109

106

+ 209

367) 204) 204) 107) 107)

+ 207 + 98 + 67 -

+ 136

agreement.

L--

245

834

Table 6 MAJOR SOURCES AND USES OF RESERVES Retrospective and Prospective Changes (Dollar amounts in millions, based on weekly averages of daily figures) F a c t o r s a f f e c t ng supp 1 y of r e s e r v e s Foreign Other nonmember Currency Federal Reserve o

Period

credit (excl. floatanks

outside

Float

operations

( S i g n

ind i c a t es

deposits and gold loans

e c t

deposits and F.R. accounts

r e e

Change in total reserves

Bank use of reserves reserves

reses reserves

r v e s)

Year. 1969 (12/25/68 - 12/31/69 1970 (12/31/69 - 12/30/7Q

+5,539 43,351

-+1,150

-2,676 -3,122

- 813 + 773

+ 241 + 667

+ +

54 1

- 898 -1,655

+1,448

+1,340

+ 108

+1,163

+1,257

14 - 45 + 100 + 169 + 95

+ + +

193 561 10 527 640

+ + + +

153 324 49 124 321

+ 40 + 237 - 59 - 403 + 319

Weekly: 1970--Sept.

2 9 16 23 30

+ + +

189 473 248 982 689

---36 -214

+ +

196 170 205 124 861

+ 15 78 + 154 - 124 + 35

+ + + -

217 379 183 552 833

+ + + + +

20 4 6 21 4

482

260

+ 271

248

328

14 21 28

+ -

5 224 479

----

329 549 432

- 163 63 71

+ 174 + 576 - 311

+ -

4 9 15

+ 1 + 230 + 1

+ -

322 426 443

+ -

11 278 445

- 311 + 148 + 2

Nov.

4 11 18 25

+ 4 -

692 48 671 141

-----

+ -

46 353 545 298

+ 146 + 81 + 88 + 153

+ +

382 482 210 275

+ +

24 1 17 18

- 271 86 + 16 - 397

+ + + -

205 73 38 390

+ + + -

78 109 156 302

+ 127 36 - 118 - 88

Dec.

2 9 16 23 30

+ + -

986 303 697 122 143

------

+ +

13 85 263 688 264

+ 34 + 103 - 107 + 1 - 376

+ + +

349 174 85 873 843

+ + -

5 8 3 8 19

- 187 39 + 75 + 206 24

+ + + +

502 157 320 260 545

+ + + + +

161 124 336 169 322

+ 341 - 281 16 + 91 + 223

1971--Jan.

6 13 20 27

+ + -

938 534 64 204

- 385 ----

+ + + +

319 601 450 544

+ 188 63 + 108 - 275

+ -

250 673 191 889

+ -

8 4

50 + 305 26 34

+ + -

768 369 787 857

+ 657 + 144 + 727 -1,047

+ 111 - 513 + 60 + 190

3 10 17

+ 8 - 236 +1,523

----

+ 3 -237 587

+ 289 - 256 50

- 402 + 542 - 533

+ -

16 4 10

- 130 7 + 97

213 199 442

168 167 350

45 -32 + 92

928

-102

+418

+ 844

- 515

286

306

279

220

- 752

374

227

- 147

10 17 p 24 p 31 p

+ +

275 761 516 506

-----

+ +

92 628 177 421

- 105 + 508 - 186 60

+ + -

+ 2 5 + 20 -41

37 + 280 + 85 9 -

+ +

138 523 426 478

+ +

50 371 255 121

88 + 152 - 171 + 357

Oct.

Feb.

Mar.

1/ For retrospective details, see Table 5. Includes $400 million in special drawing account. _2 p - Preliminary.

214

185 392 348 337

Cite this document

APA

Federal Reserve (1971, April 5). Bluebook. Bluebooks, Federal Reserve. https://whenthefedspeaks.com/doc/bluebook_19710406

BibTeX

@misc{wtfs_bluebook_19710406,
  author = {Federal Reserve},
  title = {Bluebook},
  year = {1971},
  month = {Apr},
  howpublished = {Bluebooks, Federal Reserve},
  url = {https://whenthefedspeaks.com/doc/bluebook_19710406},
  note = {Retrieved via When the Fed Speaks corpus}
}